Bitcoin has remained trapped in a tight range heading into the holiday season, with support around $85,000 and resistance near $93,000. Thin liquidity and year-end de-risking have pushed many traders to the sidelines, leaving the market vulnerable to sharp moves despite reduced leverage, according to QCP Capital.
Key Market Moves
Perpetual Open Interest Falls: Overnight, Bitcoin saw roughly $3 billion in perpetual open interest drop, while Ethereum lost $2 billion, reflecting sidelined traders and cautious sentiment.
Boxing Day Options Expiry: The upcoming Boxing Day options expiry is expected to add volatility, with around 300,000 Bitcoin contracts worth $23.7 billion expiring, representing over 50% of Deribit’s open interest.
Santa Rally Optimism Remains: Despite limited conviction, $100,000 call options remain relatively steady, suggesting some traders still hope for a year-end rally.
Liquidity and Volatility
QCP notes that holiday trading has historically meant-reverted, with low liquidity driving temporary spikes that often fade as markets return in January. Additionally, tax-loss harvesting ahead of December 31 could increase short-term volatility, as crypto investors can realize losses and immediately re-enter positions without the wash-sale restrictions that equities face.
On-chain data also points to weakening market participation: buy volume in Binance futures has declined, and active addresses are dropping, indicating reduced OTC activity and overall engagement.
ETFs and Institutional Activity
Year-end pressures have pushed Bitcoin ETFs to record $461.8 million in outflows over three days, led by BlackRock and Fidelity. Yet institutional holders are largely staying put, with U.S. spot ETF holdings declining by less than 5% despite a 30% drawdown from October highs.
“Selling pressure is primarily retail-driven from leveraged and short-term participants,” said Ray Youssef, CEO of NoOnes.
Globally, crypto ETPs have still seen $87 billion in net inflows since January 2024, showing ongoing institutional interest.
What Analysts Are Saying
Experts see two possible scenarios for Bitcoin’s year-end action:
The current drawdown is a strategic pause by large players before renewed accumulation.
The market is undergoing a deeper reset, influenced by macroeconomic headwinds and Federal Reserve policy.
John Glover, CIO of Ledn, expects continued volatility, with prices potentially dipping to $71K–$84K before a final upward wave. He projects a longer-term target of $145K–$160K once the current correction concludes.
Farzam Ehsani, CEO of VALR, predicts Bitcoin could revisit the $100K–$120K range in the second quarter of 2026, while Michael Van De Poppe notes that the market’s rejection at $90,000 isn’t alarming, as maintaining $86K as support could provide the momentum needed to test higher resistance levels.
